Six on "our" Economy: The Virus That’s Really Killing Americans? Greed; No, unemployment benefits do not discourage work; Wall Street’s COVID Bonanza Grew From the Perfect Storm of Fear and Greed; Poultry and Prisons; Can Corporations Walk the Walk
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"The holy mantra of health professionals was coined about 2,500 years ago by the Greek physician Hippocrates: “Do no harm.”
Of course, that was before corporate healthcare took charge and asserted a new guiding ethic: “Jack up profits.”
Putting this in practice, America’s largest and richest hospital chains rushed to the front of the COVID-19 bailout line this spring to pull $15 billion from the government’s emergency fund. They pocketed the taxpayers’ money despite sitting on tens of billions of dollars of their own cash reserves.
But hold your nose, for it gets much stinkier.
The bailout was intended to keep hospital workers on the job. Yet the wealthiest chains have hit nurses, janitors, and other crucial frontline staffers with layoffs, pay cuts, and deadly shortages of protective gear.
For example, HCA, the $36-billion a-year health care behemoth that’s wallowing in profits, snatched a billion-dollar taxpayer bailout for itself, then demanded hospital staffers accept wage freezes and the elimination of company pension payments… or have thousands of jobs eliminated.
However, in a public show of compassion, HCA’s chief executive Samuel Hazen donated two months of his $1.4 million salary to an employee support fund. Magnanimous? Deceptive is more like it.
The trick is that a CEO’s “salary” is a miniscule part of total pay. Hazen’s annual bonus, stock payouts, and other compensation will raise his actual pay to almost $27 million.
So his donation is less than 1 percent of his pay, and he almost certainly will write that off his income taxes. That means we taxpayers — including the nurses and others he’s knocking down — not only underwrite his fat take-home pay, but we also subsidize his face-saving philanthropic gimmick.
What we have here is a raging virus of executive suite greed doing deeper damage to our society than COVID-19 ever could."
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Republicans falsely claim an extra weekly $600 for the unemployed is a disincentive for people to work. Congress should extend the benefit to prevent economic free fall.
"As Congress aims to pass another coronavirus relief package, the Trump administration and Republicans on Capitol Hill are insisting on a reduction to the weekly federal unemployment insurance benefit, arguing that the extra $600 a week that Congress provided for the jobless early in the coronavirus outbreak has created a disincentive for people to go back to work. They want to reduce the boost to only $200 a week.
It’s an incredibly bad idea, based on specious logic and stereotypes. Extending the benefit at $600 is needed to combat the persistently high unemployment rate and to prevent an even worse economic collapse. Indeed, putting money directly into the pockets of Americans is one of the most important steps Congress can take to contain the economic fallout from COVID-19.
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Yet in spite of this evidence, Republicans have opted to peddle the myth that people, at their core, are lazy and unwilling to work, evoking the racist stereotype of the “welfare queen” instead of ensuring that Americans can pay their bills, do not fall into poverty, and still spend money in an economy starved for consumers.
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And yet the biggest American companies—those with access to the debt and equity markets—have been able to raise money hand over fist during the midst of the pandemic. The numbers are fairly staggering, making them nearly incomprehensible to Americans struggling to pay their rent, or to put food on the table. How can things be so challenging for the vast majority of Americans, while others—both big companies and wealthy individuals—are able to rake in the dough? The short answer is than in the age of advanced American capitalism, those who make money from money are rewarded—hedge fund managers, private-equity moguls, stockholders, bondholders, investment bankers—while those who make money from their labor—the frontline workers in the pandemic, teachers, waiters, actors, and on and on—are kind of just scraping by.
The simple explanation for why people who make money from money have benefitted in 2020 is the remedial actions taken by the Federal Reserve. As the so-called “lender of last resort,” the Fed is able to pump huge amounts of capital into the financial system when no one else will and to buy debt securities when no one else will buy them. In other words, the Fed is uniquely positioned to grease the wheels of capitalism when they get clogged with sand. That, of course, is exactly what happened in late February and March when the full extent of COVID-19 began to dawn on most people—with the notable exception of our president—and when one state economy after another was shut down, essentially bringing to a halt economic activity and scaring investors to their core.
The bond market was equally explosive. Companies with the best credit ratings—so-called “investment-grade” companies—raised $1.2 trillion in the first half of the year, according to PriceWaterhouseCoopers, more than double the first six months of 2019. There was more corporate debt issued in the investment grade market in the first half of 2020 than in all of 2019. Issuers with less than stellar credit ratings raise money in the so-called “junk bond” market. In the first half of 2020, these companies were able to raise $202 billion, some 40% more than what was raised in this market during the first half of 2019. According to Refinitiv, global debt issuance hit $5.5 trillion in the first half of 2020, an all-time record.
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"Calls for stronger representation and community investment are certainly not new, but they have new resonance now. More and more Americans are realizing that racial equity can’t happen without economic equity.
Public policy has a huge role to play here, but so do businesses.
Corporations across the country are affirming that “Black Lives Matter.” Some are even pledging to invest millions in “racial justice” causes. But there’s been very little movement in one of the easiest areas for them to make progress: racial and ethnic representation in their own companies.
In 2019, to take just one example, the NAACP released an Opportunity and Diversity Report Card on the hotel and lodging industry. They found that in 2007, 71 percent of top management positions in the industry were held by whites. By 2015, that hadn’t improved — in fact, the figure had actually grown to 81 percent.
The Race, Wealth, and Community team at the National Council for Community Reinvestment, in partnership with Beneficial State Foundation, is now analyzing racial and ethnic representation and procurement in the financial sector.
Our research finds that Black and Latinx people each comprise just 7 percent of mid-level management positions in the industry — significantly lagging behind their 13 and 18 percent shares of the population, respectively.
This underrepresentation gets worse as you go up the corporate ladder. Only 3 percent of senior level positions are occupied by African Americans, and only 4 percent of these positions are occupied by Latinx people.
Corporate America has simply failed to represent the racial and ethnic diversity of this country in their leadership. It is past time that all corporations make data on their internal diversity — or lack thereof — public. They should also share clear, targeted short-term goals to improve these figures.
Of course, corporations could do far more than this.
They could also consciously direct their products and services, philanthropy, social missions, and advocacy work to close the racial wealth divide. For instance, they could ensure that their procurement dollars — the money they spend buying things from other businesses — go to support minority-owned firms.
In all of these areas, corporations can help the country take important steps to bridging racial economic inequality. Now is the moment when corporations can help lead in the movement for greater racial equity — instead of being a lagging indicator of inequality."
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Mitch McConnell's warped priorities
Mitch McConnell's warped priorities
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